Echo Therapeutics, Inc. today announced it has raised approximately $2.5 million through a series of private placements of the company’s stocks and warrants, as well as has received a binding commitment for an additional $3 million, led by the company’s largest shareholder, Platinum Montaur Life Sciences LLC. The funding was joined by current investors and other institutional and accredited investors.
Echo develops its needle-free Symphony™ tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring system and its Prelude™ SkinPrep System for transdermal drug delivery. The funding will equip the company with the financial resources to move forward and complete its product development.
“The completion of this financing is a watershed event for the company as we believe that we now have sufficient funds to substantially complete the product development, clinical studies and manufacturing of both our Prelude SkinPrep System, our skin permeation platform technology, and our Symphony tCGM System, our needle-free continuous glucose monitoring system,” Patrick T. Mooney, M.D., chairman and CEO of Echo stated in the press release.
Mooney said Echo is now ready to support the near-term commercialization of Prelude for the topical delivery of 4% lidocaine cream through its partner, Ferndale Pharma Group. The company said it will also finalize the Symphony tCGM biosensor and complete the clinical validation necessary for FDA clearance of the product.
“This funding enhances the company’s competitive position for Symphony in the glucose monitoring market, a $12 billion-plus annual market opportunity. We look forward to testing our commercially-ready Symphony tCGM System in a clinical trial in the near term and ultimately filing for FDA approval,” Mooney stated.
Per the press release: Echo conducted a private placement of common stock and warrants with aggregate proceeds of approximately $2.5 million through a series of closings held from November 2010 through January 2011. Investors purchased units, or partial units, at a price per unit of $25,000, consisting of (i) 25,000 shares of Echo common stock, (ii) Series 1 warrants to purchase 12,500 shares of Echo common stock with an exercise price of $1.50 per share, and (iii) Series 2 warrants to purchase 12,500 shares of Echo common stock with an exercise price of $2.50 per share.
Per today announced $3 million funding commitment from Montaur, Montaur will advance $1 million of the committed funds to Echo pursuant to a bridge note, which is intended to convert into convertible preferred stock no later than February 1, 2011. Montaur has agreed to invest an additional $2 million through the purchase of convertible preferred stock in monthly installments from February through May 2011. The financial terms of Montaur’s funding commitment are substantially similar to those of the private placement of common stock with regards to the per share purchase price, warrant coverage and terms of the warrants issued to each purchaser.
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